Earnings call transcript: Astera Labs Q2 2025 earnings beat forecasts

Astera Labs Inc., a leading provider of connectivity solutions for AI infrastructure, reported robust financial results for the second quarter of 2025. The company delivered a significant earnings surprise, with non-GAAP diluted earnings per share (EPS) of $0.44, far surpassing the forecasted $0.11. This impressive performance drove a positive market reaction, with the stock price rising 0.74% in aftermarket trading. Revenue for the quarter reached $191.9 million, marking a 150% increase year-over-year. According to InvestingPro data, the company maintains excellent financial health with a "GREAT" overall score, supported by impressive gross profit margins of 75.76%.

Key Takeaways

• Astera Labs’ Q2 2025 EPS of $0.44 exceeded expectations by 300%.
• Revenue surged to $191.9 million, a 150% increase from the previous year.
• The stock price increased by 0.74% in aftermarket trading following the earnings release.
• The company reported strong growth in its Scorpio PCD switches and PCIe 6.0 solutions.
• Forward guidance for Q3 2025 projects revenue between $203 million and $210 million.

Company Performance

Astera Labs demonstrated exceptional growth in the second quarter of 2025, driven by strong demand for its connectivity solutions in AI infrastructure. The company achieved a 20% quarter-over-quarter revenue growth and a notable 150% increase compared to the same period last year. This performance underscores Astera Labs’ competitive position in the rapidly evolving AI market, where it continues to expand its product offerings and partnerships with industry leaders such as NVIDIA and AMD.

Financial Highlights

• Revenue: $191.9 million, up 150% year-over-year.
• Earnings per share (EPS): $0.44, significantly above the forecast.
• Non-GAAP gross margin: 76%, an increase of 110 basis points.
• Non-GAAP operating margin: 39.2%, up 550 basis points.
• Cash and equivalents: $1.07 billion.

Earnings vs. Forecast

Astera Labs reported an EPS of $0.44, vastly exceeding the forecasted $0.11, resulting in a 300% earnings surprise. This substantial beat highlights the company’s ability to capitalize on the growing demand for AI infrastructure solutions, marking a significant improvement compared to previous quarters.

Market Reaction

Following the earnings announcement, Astera Labs’ stock price rose by 0.74% in aftermarket trading, reflecting investor confidence in the company’s strong financial performance and future prospects. The stock, which closed at $137.93, remains well within its 52-week range of $36.22 to $147.39. With a market capitalization of $22.26 billion and a remarkable 209.59% return over the past year, the company has demonstrated strong momentum. Access detailed valuation metrics and Fair Value analysis through InvestingPro’s comprehensive research reports, available for 1,400+ top US stocks.

Outlook & Guidance

Astera Labs provided an optimistic revenue guidance for Q3 2025, projecting between $203 million and $210 million, indicating a growth of 6% to 9%. The company anticipates continued expansion in its Scorpio X Series and UA Link solutions, which are expected to drive future growth.

Executive Commentary

CEO Jitendra Mohan emphasized the significant market opportunity for AI infrastructure, stating, "Scale-up connectivity for rack scale AI infrastructure alone will add close to $5 billion of market opportunity for us by 2030." Sanjay Gajendra, President and COO, highlighted the company’s strategic focus, saying, "Our goal is to deliver a purpose-built connectivity platform that includes silicon, hardware, and software solutions."

Risks and Challenges

• Supply Chain Issues: Potential disruptions could impact production and delivery timelines.
• Market Saturation: Increasing competition in the AI connectivity market may pressure margins.
• Macroeconomic Pressures: Global economic uncertainties could affect customer spending.
• Technological Advancements: Rapid changes in technology require continuous innovation.
• Regulatory Changes: New regulations could impact operational costs and market access.

Q&A

During the earnings call, analysts inquired about the company’s plans for expanding beyond AI into general-purpose compute and the interest in UA Link from hyperscalers. Executives addressed these topics, highlighting their focus on developing flexible connectivity solutions to meet diverse platform needs.

Full transcript - Astera Labs Inc (ALAB) Q2 2025:

Rebecca, Conference Operator: Good afternoon. My name is Rebecca, and I will be your conference operator today. At this time, I would like to welcome everyone to the Astera Labs Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After management remarks, there will be a question and answer session.

Thank you. I will now turn the call over to Leslie Green, Investor Relations for Astera Labs. Leslie, you may begin.

Leslie Green, Investor Relations, Astera Labs: Thank you, Rebecca. Good afternoon, everyone, and welcome to the Astera Labs second quarter twenty twenty five earnings conference call. Joining us on the call today are Jitendra Mohan, Chief Executive Officer and Co Founder Sanjay Gajendra, President, Chief Operating Officer and Co Founder and Mike Tate, Chief Financial Officer. Before we get started, I would like to remind everyone that certain comments made in this call today may include forward looking statements regarding, among other things, expected future financial results, strategies and plans, future operations and the markets in which we operate. These forward looking statements reflect management’s current beliefs, expectations and assumptions about future events, which are inherently subject to risks and uncertainties that are discussed in detail in today’s earnings release and in the periodic reports and filings we file from time to time with the SEC, including the risks set forth in our most recent annual report on Form 10 ks and our upcoming filing on Form 10 Q.

It is not possible for the company’s management to predict all risks and uncertainties that could have an impact on these forward looking statements or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward looking statement. In light of these risks, uncertainties and assumptions, the results, events or circumstances reflected in the forward looking statements discussed during this call may not occur, and actual results could differ materially from those anticipated or implied. All of our statements are made based on information available to management as of today, and the company undertakes no obligation to update such statements after the date of this call, except as required by law. Also during this call, we will refer to certain non GAAP financial measures, which we consider to be an important measure of the company’s performance. These non GAAP financial measures are provided in addition to and not as a substitute for financial results prepared in accordance with U.

S. GAAP. A discussion of why we use non GAAP financial measures and reconciliations between our GAAP and non GAAP financial measures is available in the earnings release we issued today, which can be accessed through the Investor Relations portion of our website. And with that, I would like to turn the call over to Jitendra Mohan, CEO of Acera Labs. Jitendra?

Jitendra Mohan, Chief Executive Officer and Co-Founder, Astera Labs: Thank you, Leslie. Good afternoon, everyone, and thanks for joining our second quarter conference call for fiscal year twenty twenty five. Today, I’ll provide an overview of our q two results, followed by a discussion around our rack scale connectivity vision. I will then turn the call over to Sanjay to walk through Astera Labs’ near and long term growth profile. Finally, Mike will give an overview of our q two twenty twenty five financial results and provide details regarding our financial guidance for q three.

Asterra Labs delivered strong results in q two with all financial metrics coming in favorable to our guidance. Quarterly revenue of $191,900,000 was up 20% from the prior quarter and up 150 percent versus Q2 of last year. Growth within the quarter was driven by both our signal conditioning and switch fabric product lines, establishing a meaningful new revenue baseline for the company to build upon. This quarter, we achieved a key milestone with our market leading Scorpio PCD switches, supporting PCI six scale out applications, ramping into volume production to support the deployment and general availability of customized rack scale AI system designs based on merchant GPUs. Strong demand for our PCIe six solutions helped to drive material top line upside during the quarter.

Scorpio exceeded 10% of total revenue, making it the fastest ramping product line in the history of Astera Labs. Furthermore, we continue to see strong activity and engagement across both our Scorpio p series and x series PCIe fabric switches, and we are pleased to report that we won new designs across multiple new customers during the quarter. We remain on track for Scorpio to exceed 10% of total revenue in 2025, while becoming the largest product line for Astera Labs over the next several years. Our ADX product family grew during the quarter and continues to diversify across both GPU and custom ASIC based systems for a variety of applications, including scale up and scale out connectivity. Additionally, our first to market a v six solutions supporting PCI six began volume ramp during the quarter within rack scale merchant GPU based systems.

Our Taurus product family demonstrated strong growth driven by AEC demand supporting the latest merchant GPUs, customer accelerators, as well as general purpose compute platforms. Yeo continues to ship in preproduction quantities as customers expand their development rack clusters to qualify new systems leveraging the recently introduced TXL capable data center CPU platforms. In addition to strong financial and operational performance during q two, we continue to expand our strategic relationships across both customers and ecosystem partners as the industry pushes forward with innovative new technologies. First, we’ve broadened our collaboration with NVIDIA to support NVLink Fusion, providing additional optionality for customers to deploy NVIDIA AI accelerators while leveraging high performance scale up networks based on NVLink technology. Next, we announced a partnership with Alchip Technologies to advance the silicon ecosystem for AI Rack scale infrastructure by combining our comprehensive connectivity portfolio with their custom ASIC development capabilities.

Within the CXL ecosystem, industry progress continues with SAP recently highlighting their collaboration with Microsoft, featuring Intel’s Xeon six processors to optimize SAP HANA database performance by utilizing CXL memory expansion. Lastly, we joined AMD on stage during their Advancing AI twenty twenty five keynote presentation as a trusted partner to showcase UALink, which is the only truly open memory semantic based scale of fabric purpose built for AI workloads. To continue the relentless pursuit of AI model performance, data center infrastructure providers are beginning a transformation to what we call AI infrastructure two dot o. We define this AI infrastructure two dot o transition as the proliferation of open, standard spaced, AI rack scale platforms that leverage broad innovation, interoperability, and a diverse multi vendor supply chain. This transition is in its early stages, and we are strategically crafting our roadmaps to help lead these secular connectivity trends over the coming years.

The transition to AI infrastructure two point o is especially significant at the rack level as modern AI workloads demand ultra low latency communication between hundreds of tightly integrated accelerators over a scale up network. Asterra Labs is well positioned to support this infrastructure transformation as an anchor solution partner with expertise across the entire connectivity stack. First, we support a variety of interconnect protocols, including ULE Link and PCIe for scale up, Ethernet for scale out, and CXL for memory. We are very excited about the momentum behind the UOLINK scale up connectivity standard, which exemplifies the open ecosystem approach by combining the low latency of PCIe and the fast data rates of Ethernet to deliver best in class end to end latency and bandwidth. Next, we provide a broad suite of intelligent connectivity products to address the entire rack across both purpose built silicon and hardware solutions, all featuring our Cosmos software for best in class speed monitoring and management.

Lastly, our deep partnerships across the entire ecosystem continue to expand as we work closely with ASIC and GPU vendors to align features, interoperability, and road maps to solve the rack scale connectivity challenges of tomorrow. In summary, Astero Labs has demonstrated strong momentum in our business, and the prospects for continued diversification and scale are driving our roadmaps in r and d investment. We are in the early stages of the AI infrastructure two dot o transformation, which Asterra Labs is uniquely positioned to help proliferate over the coming years. Scale up connectivity for rack scale AI infrastructure alone will add close to $5,000,000,000 of market opportunity for us by 2030, and we remain committed to supporting our customers as they choose the architectures and technologies that best suit their AI performance goals and business objectives. With that, let me turn the call over to our President and COO, Sanjay Gajendra, to outline our vision for growth over the next several years.

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: Thanks, Chitindra, and good afternoon, everyone. Today, I want to provide an update on our recent execution followed by an overview of the meaningful market opportunities and growth catalyst that Ester Labs will address within the forthcoming transition to AI infrastructure two dot o. Our goal is to deliver a purpose built connectivity platform that includes silicon, hardware, and software solutions for rack scale AI deployments. To achieve this goal, our approach has been to increase our addressable dollar content in AI servers by rapidly expanding our product lines to provide a comprehensive connectivity platform and capture higher value sockets that includes smart cable modules, gearboxes and fabric solutions. We also see increasing attach rates driven by higher speed interconnects in platforms deployed by customers who are collectively investing hundreds of billions of dollars on AI infrastructure annually.

Starting in 2025, Estero Labs executed the next step in its high growth evolution by ramping our PCIe Scorpio fabric switches and 86 retimers into volume production. This latest wave of growth has further diversified our overall business as we now have three product lines contributing about 10% of total sales. During this transition, our Silicon Dollar content opportunity has expanded into the range of multiple hundreds of dollars per AI accelerator, which has effectively established a new revenue baseline for the company. Looking ahead, we are excited about the opportunities enabled by scale up interconnect topologies. Given the extreme importance of scale up connectivity to overall AI infrastructure performance and productivity, we see Scorpio X Series solutions as the anchor socket with the next generation AI racks.

We are engaged with over 10 unique AI platform and cloud infrastructure providers who are looking to utilize our fabric solutions for their scale up networking requirements. We look for Scorpio X Series to begin shipping for customized scale up architectures in late twenty twenty five with a shift to high volume production over the course of twenty twenty six. With the ramp of Scorpio X Series for scale up connectivity topologies next year, we expect our overall silicon dollar content opportunity per AI accelerator to significantly increase. Overall, we expect this to be another step up from a baseline revenue standpoint. Also, given the size of the scale up connectivity opportunity, we expect our Scorpio X Series revenue to quickly outgrow Scorpio P Series revenue.

In 2026 and beyond, cloud platform providers and hyperscalers will begin to deploy next generation platforms as the industry transitions to AI infrastructure two point zero. We believe the fastest path to this transformation lies in purpose built solutions developed within open ecosystems with a multi vendor supply chain. For Astera Labs, this transformation will be the catalyst for the next wave of overall market opportunity and revenue growth. Our expertise and support for major interconnect protocols including PCIe, Ethernet, TXL and UA Link puts us in an excellent position to participate in these next generation design conversations. ULE Link represents the cleanest and most optimized scale up strategy for AI accelerator providers given its robust performance potential, open ecosystem, diverse supply chain, and purpose built approach.

Early industry momentum has been very encouraging with multiple hyperscalers and several compute platform providers looking to incorporate UA Link into their accelerator roadmap and engaging with RFPs as an indication of strong interest. As a leading promoter of UA Link, Esterile Labs is committed to developing and commercializing a broad portfolio of UA Link connectivity solutions ranging from AI fabrics to signal conditioning solutions and other IO components. Proliferation of UA Link in 2027 and beyond will represent a long term growth vector for Esterile Labs. In conclusion, we are proud of our execution over the past several years demonstrating strong and profitable revenue growth, diversification of customers and application, and exposure to a broadening range of AI infrastructure applications and use cases. We believe this momentum is in its early stages as we fully embrace an industry transition to AI infrastructure 2.o, which will expand our opportunity across even more customers and platforms.

Over the next several years, we look to build upon this newly established baseline of business as we partner tightly with our customers and the broader ecosystem to deliver and deploy best in class RAC scale solutions to fuel the next wave of AI evolution. With that, I will turn the call over to our CFO, Mike Tate, who will discuss our Q2 financial results and our Q3 outlook.

Mike Tate, Chief Financial Officer, Astera Labs: Thanks Sanjay, and thanks to everyone for joining the call. This overview of our Q2 financial results and Q3 guidance will be on a non GAAP basis. The primary difference in Astero Labs’ non GAAP metrics is stock based compensation and its related income tax effects. Please refer to today’s press release available on the Investor Relations section of our website for more details on both our GAAP and non GAAP Q3 financial outlook as well as a reconciliation of our GAAP to non GAAP financial measures presented on this call. For 2025, Acera Labs delivered quarterly revenue of $191,900,000 which was up 20% versus the previous quarter and 150 percent higher than the revenue in 2024.

During the quarter, we enjoyed revenue growth from both our Ares and Taurus product lines supporting both scale up and scale out PCIe and Ethernet connectivity for AI rack level configurations. Scorpio’s smart fabric switches transitioned to volume production in q two with our P Series product line for PCIe six scale up applications deployed within leading GPU customized rack scale systems. LEO CXL controller shifted preproduction volumes as customers continue to work towards qualifying platforms ahead of volume deployment. Q2 non GAAP gross margin was 76 percent and was up 110 basis points from March levels with product mix remaining largely constant across higher volumes. Non GAAP operating expenses for Q2 of $17,700,000 were up roughly $5,000,000 from the previous quarter as we continue to scale our R and D organization to expand and broaden our long term market opportunity.

Within Q2 non GAAP operating expenses, R and D expenses were $48,900,000 Sales and marketing expenses were $9,400,000 and general and administrative expenses were $12,400,000 Non GAAP operating margin for Q2 was 39.2%, up five fifty basis points from the previous quarter. Interest income in Q2 was $10,900,000 Our non GAAP tax rate for Q2 was 9.4%. Non GAAP fully diluted share count for Q2 was 178,100,000.0 shares. And our non GAAP diluted earnings per share for the quarter was $0.44 Cash flow from operating activities for Q2 was $135,400,000 And we ended the quarter with cash, cash equivalents and marketable securities of $1,070,000,000 Now turning to our guidance for 2025. We expect Q3 revenues to increase to within a range of $2.00 $3,000,000 and $210,000,000 up roughly 6% to 9% from the second quarter levels.

For Q3, we expect Ares, Taurus and Scorpio to provide growth in the quarter. For Ares, we are seeing growth from a number of end customer platforms where we support scale up and scale out connectivity. Taurus growth is driven by new designs going into volume production for scale out connectivity. Scorpio will primarily be driven by the continued deployment of our P Series solutions for scale out applications on third party GPU platforms. We expect non GAAP gross margins to be approximately 75% with the mix between our silicon and hardware module businesses remaining largely consistent with Q2.

We expect third quarter non GAAP operating expenses to be in the range of approximately $76,000,000 to $80,000,000 Operating expense growth in Q3 is driven by the continued investment in our research and development function as we look to expand our product portfolio and grow our addressable market opportunity. Interest income is expected to be $10,000,000 Our non GAAP tax rate should be approximately 20%. The increase in our non GAAP Q3 tax rate reflects the impact of the recent change in the tax law passed in July with an expectation that our full year non GAAP tax rate for 2025 to now be approximately 15% following this tax law change. Our non GAAP fully diluted share count is expected to be approximately 180,000,000 shares. Adding this all up, we are expecting non GAAP fully diluted earnings per share of a range of $0.38 to $0.39 This concludes our prepared remarks.

And once again, we appreciate everyone joining the call. And now we will open the line for questions. Operator?

Rebecca, Conference Operator: Your first question comes from the line of Harlan Sur with JPMorgan. Your line is open.

Harlan Sur, Analyst, JPMorgan: Good afternoon. Congratulations on the very strong results. Within your Scorpio family of switching products, it’s good to see the strong ramp of Scorpio P this past quarter. Within the same portfolio, it looks like the team is qualified and set to ramp its Scorpio X series for XPU to XPU ASIC connectivity. You talked about 10 platform wins.

What’s been the biggest differentiator? Is it is it performance, I e, latency, throughput? Is it fully optimized be with your signal conditioning product? Is that a consideration? And how much does the familiarity with Cosmos software play a role?

And you guys have always called this an anchor product, which pulls in more of your solutions alongside your Cosmos software suite. Is is this how it’s playing out with your basic XPU customers you lead with Scorpio X, and you’ve been successful at driving higher attach with your other products?

Jitendra Mohan, Chief Executive Officer and Co-Founder, Astera Labs: Yeah. Pardon. Thank you so much for the question, and you are absolutely right. The success that we have enjoyed so far is rooted on primarily, I would say, three things. First is just our closeness to our customers.

So over this time period, we want the kind of a trusted partner status with our customers, so we get a ringside view of what their plans are, what it is that they’re planning to deploy, and when. The second part of that is really our execution track record. We have shown time and again, that that our team executes with purpose, and we deliver to our promises. With both of these, we get the first sort of, you know, call for developing new products for going into new product platforms at our customers. And that’s where the Cosmos software suite comes in.

Cosmos for the audience here, is our our software suite that unites all of our products together. And this is how we allow our products to be customized, optimized for for unique applications, as well as collect a lot of very rich diagnostics information that allows our customers to really see how their, incorrectivity infrastructure is operating. So with the use of Cosmos, we can customize our products to deliver higher performance, which translates to sometimes lower latency, sometimes higher throughput, sometimes different diagnostics features for our customers. And as a result of that, we’ve been able to to use Scorpio as an anchor socket, in these applications because this is something get that’s that gets designed in upfront. And then we figure out single conditioning opportunities with our eighties and Taurus products in these platforms.

And the the ScorpioX in particular and the ScorpioX in particular because the customers use kind of derivatives of PCI Express, we have been able to customize ScorpioX to deliver this lower latency and higher throughput.

Harlan Sur, Analyst, JPMorgan: Well, thank you for that. Very insightful. And and and for my second question, you know, just over the past ninety days, we’ve put a lot of focus and announcements on scale up networking connectivity. On UA Link, as you mentioned, right, the team did, the Wall Street teaching back in May. Obviously, the team is a key member of the UA Link consortium.

AMD, you know, recently fully endorsed UA Link as its scale up networking architecture of choice for all future generations of its rack scale solutions, and we know of at least one other ASIC XPU vendor that’s gonna be moving to UA Link as well. Beyond this, like, what’s been the reception and interest level on UA Link? And can or will the Asterra team speed up its time to market on UA Link based products, or is the timing still to sample products next year with volume deployment in calendar twenty seven?

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: Yes. Harlan, this is Sanjay here. Thank you for the question. To your point, absolutely, we see tremendous amount of interest with ULE Link. There are, obviously, the technical advantages that you get with low latency and familiarity with how the the transport layer works based on its roots, which is PCIe.

Also, the fact that it supports memory semantics natively is also a strong reason why customers are are liking that interface. The big upside, of course, is the physical layer, which now has been upgraded to support up to 200 gig on the Ethernet side. So there are several technical reasons that are going in favor of our ULE link. So customers that were using PCIe or PCIe like fabrics see this as a natural progression in order to support the the AI infrastructure needs going forward. Now what we’ll also note is that, you know, it’s not just about technical stuff.

It’s about ecosystem and the broad availability of components that are required for scale up. And that’s again where UVLink shines in the sense that it’s truly a open standard. It’s truly a multi vendor supply chain. And those are additional reasons why customers tend to gravitate towards your link. And we do have, like, noted several customers.

We’re counting 10 plus right now that are looking at leveraging some of these open standards, whether it’s PCIe in the short term, combination of PCIe and UA link in the midterm, and transitioning perhaps to a broader UOLINK deployment in 2027 and later. So overall, I think the momentum is shifting positively, and we’re excited to be in the middle of it and driving the adoption of open and scalable supply chain in the market.

Harlan Sur, Analyst, JPMorgan: Great. Thank you.

Rebecca, Conference Operator: Your next question comes from the line of Ross Seymore with Deutsche Bank. Your line is open.

Ross Seymore, Analyst, Deutsche Bank: Hi, guys. Thanks for letting me ask a couple of questions and congrats on the strong results and guidance. Maybe to no surprise, I wanted to stay on the Scorpio family. The diversity of engagements interesting to me. And as far as you’re talking about it as an anchor tenant, I just wondered if you could go into a little bit of the profile of the types of customers, how it’s changed from your initial customer?

And then perhaps how much incremental business and interest those customers are showing in other products as they realize as well it’s an anchor tenant? Sort of how are you leveraging that Scorpio relationship to bring in more business? Any sort of illustrations of that would be helpful.

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: Absolutely. Again, thank you for that question. So just to kind of remind, we have two product series within Scorpio. One is the Scorpio P Series that just started ramping to production to support some of the third party GPUs that are ramping. And the PC this is designed for scale out connectivity, very broad use case from interconnecting GPUs to custom mix, to storage and things like that.

So Scorpio p series, we have a broad base of customers that are that are leveraging that solution, designing in, going to production, you know, deep in technical evaluations and so on. So that would be a broad play for us with PCIe based scale out interconnect and storage type of interconnect. Scorpio x series, which is designed for scale up networking to interconnect the GPUs and accelerator. This, we see, like, noted as an anchor socket because that is truly the socket that holds all the GPUs together. And today, like we noted, we have 10 plus customers that we’re engaging when it comes to, scale up, networking using Scorpio x series.

And this is also pulling in rest of our products, both because of the, the advantages that Cosmos brings to the table by unifying all of our product, plus at the same time, the fact that someone is using a fabric solution and they would need a gearbox or a retimer or other controller type of products, those are all playing into having that first call with the customer or having that early access at an architectural stage, which translates into an opportunity for us where we can not only offer the the fabric device, but also the surrounding components that come along with it as a connectivity platform.

Ross Seymore, Analyst, Deutsche Bank: Thanks for that color. And I guess as my second question, one for Mike and I think the first one is going to be pretty quick, I might have a clarification in there as well. The gross margin is beaten and you’re staying solidly above your 70% long term target. So I guess the question is, is there anything that slows down your trajectory to the 70? And the clarification would be the tax rate at 20%.

Is that this next year? Which is the number we should think of going forward, the 15%, the 20% or the 10 you used to be? Okay.

Mike Tate, Chief Financial Officer, Astera Labs: Thanks, Ross. I’ll start with the taxes. The 20 is specifically to Q3 because that was the quarter that the tax law changed, so we had to catch up for the previous two quarters. For q four, you should expect it to normalize around 15%. And then, you know, longer term with this new tax law in place, it’s it’s probably in the around the 13% range.

For the gross margins, when we have an inflection up in revenues like we did, you you do have the benefit of higher revenues over fixed operating costs. So that that was the incremental benefit for us. We do expect to see some pretty good growth from our hardware modules going into the back half of this year into 2026. So as we make it through 2026, we still encourage people to think of our long term target model 70% as as something that we’ll be delivering.

Joe Moore, Analyst, Morgan Stanley: Thank you.

Rebecca, Conference Operator: Your next question comes from the line of Blayne Curtis with Jefferies. Your line is open.

Blayne Curtis, Analyst, Jefferies: Hey, guys. I’ll echo the congrats on the results. I guess I want to ask on the Scorpio products. I mean, I think 10% in the June was ahead of what many people were looking at.

Jitendra Mohan, Chief Executive Officer and Co-Founder, Astera Labs: So maybe you can just help us with

Blayne Curtis, Analyst, Jefferies: the shape of that product. Mean, you still said 10% for the year. I’m assuming it’s or greater than 10%, but I’m sure it’s much greater than that.

Jitendra Mohan, Chief Executive Officer and Co-Founder, Astera Labs: I mean, can you help us a little bit with as

Blayne Curtis, Analyst, Jefferies: you look to September, you know, you have $15,000,000 of growth, how to think about Ares versus Scorpio, and if you any kind of thoughts on how to guide us to model this Scorpio product line this year?

Mike Tate, Chief Financial Officer, Astera Labs: Yeah. This is Mike. Yeah. For q two, the Scorpio P launched into volume production a little ahead of what we anticipated, so it provided the upside in in the quarter. From this base level now, it is it continues to grow in q three and q four.

But we we have more p series designs kind of coming into play that will layer on top of it, but that’s more in 2026. For the x series, we we do have preproduction volumes here, but, really, that starts to go into high volume production during the course of 2026 and layering even more growth. Ultimately, what we called out is the x series is gonna be grow grow grow to be bigger than p series. So it’s a very exciting opportunity just given the dollar value of the design opportunities are much higher than the p series just given the use cases of the scale up connectivity. So both both will will grow.

We did we did reiterate that it will exceed 10% of our revenues for the year, which is quite an accomplishment for the first year of our product line. It is poised to be our largest product line of the company as as we make it through the the following two years.

Harlan Sur, Analyst, JPMorgan: Thanks. And I just want

Blayne Curtis, Analyst, Jefferies: to ask, I think, in terms of the scale up opportunity, clearly, you were clear that X will be more material next year, kind of preproduction this year. Just want to ask this because there was a lot of rumors out there in terms of are there any opportunities for scale up with Scorpio P or maybe in short, are you gonna be shipping anything material this year for for scale up versus the scale out you already talked about?

Mike Tate, Chief Financial Officer, Astera Labs: The the the scale up this year is predominantly preproduction volumes. And, you know, these systems are pretty complex that they’re shipping into. So we, like, try to be conservative on how we, you know, telegraph those going forward. But the the volume opportunities scale up connectivity for switching is a much bigger dollars opportunity for us as we as we look forward. But those designs really will start to enter into full volume production during the course of 2026.

So not an immediate you know, not not a driver in the the next couple of quarters.

Quinn Bolton, Analyst, Needham and Company: Thanks, Mike.

Rebecca, Conference Operator: Your next question comes from the line of Joe Moore with Morgan Stanley. Your line is open.

Joe Moore, Analyst, Morgan Stanley: Great. Thank you. I wonder if you could talk about UA Link versus other architectures and I guess your involvement with NBL Infusion. Are you agnostic to those various solutions? Are you more favorable towards open source or proprietary?

Just kind of walk us through the potential outcomes for you and with these these battles that are being fought.

Jitendra Mohan, Chief Executive Officer and Co-Founder, Astera Labs: Yeah. Yeah. Joe, this is Jitendra. Happy to do that. So let’s start with NVLink just because NVLink is perhaps the most widely deployed scale up architecture that’s available today.

And we are very happy to be, you know, part of the NVLink fusion ecosystem. So if you look at the history of NVLink, it really is a a fabric that is built ground up for AI. It uses memory semantics to make sure that all of the GPUs can be addressed as, you know, as if they are one large GPU. It has low latencies. It does add Ethernet based service to get the highest speed.

And, of course, NVIDIA has popularized that with their NVL 72 deployment. If you go from there to, let’s say, UA link, you find many similarities. UA link also has this Genesis in in PCI Express. It is a memory semantics based protocol. It uses lossless networking, you know, several other technical advancements that are suitable for AI workloads.

And then the whole protocol is really custom built for for optimizing the throughput for AI type of traffic. So I think it does offer a a several advantages over other more proprietary protocols, some of which happen to be Ethernet based and some are completely proprietary as well. The other advantage of UOLINK is it’s open. It’s an open ecosystem. We know that many hyperscalers are are part of the the the the promoter board members, as well as many vendors, frankly, are working to deploy solutions for this UOLINK.

And as a result, we expect to see a very vibrant ecosystem of provider of vendors and and customers with the UOLINK. And I think that’ll be defining characteristic and why we believe UOLINK will be adopted widely, over time. And as a promoter members of Eurolink consortium ourselves, we are very happy to both participate in this standard, and not only participate, but come up with a full portfolio of solutions that includes switches, retimers, cables, and what have you to enable our customers to build a full ULE link. So to to answer the question the other question that you asked, with ULE link, we have a lot of dollar content opportunity. But at the same time, we will continue to service our customers who are today using PCI Express, and we have a huge opportunity there, as well as Ethernet for scale out applications, for cabling applications, and over time, also within billing fusion.

Joe Moore, Analyst, Morgan Stanley: That’s very helpful. Thank you.

Leslie Green, Investor Relations, Astera Labs0: And then I get the

Joe Moore, Analyst, Morgan Stanley: question a lot. If you guys can size your exposure to merchant GPU platforms versus ASIC, I know there’s probably a little bit higher content opportunity for you on the ASIC side, but any sense for what that split looks like and where that may be going over time? Yeah.

Jitendra Mohan, Chief Executive Officer and Co-Founder, Astera Labs: Just so we do address both of these opportunities. Our opportunity on the merchant g p GPU platform comes when our customers customize the rack designs. This is the opportunity for both our a d’s and score p o p c d that Sanjay and Mike touched upon earlier. We saw a lot of ramp happening with that, you know, this last quarter. In addition to that, we are also shipping the Taurus Ethernet cables for scale out applications.

But when you go to the scale up, that becomes a very big opportunity for us just because of the density of interconnect when you’re trying to connect all of these GPUs together. And when that network happens to be based on PCI Express, we have an even larger attach rate, which drives our dollar content on these XPU platforms into several hundreds of dollars per XPU. So over time, we do see the the, Scott to X family as our largest revenue contributor, and largely deployed on on XPUs.

Joe Moore, Analyst, Morgan Stanley: Great. Thank you very much.

Rebecca, Conference Operator: Your next question comes from the line of Tom O’Malley with Barclays. Your line is open.

Leslie Green, Investor Relations, Astera Labs1: Hey, guys. Thanks for taking my question. You mentioned that you were engaged with 10 plus customers on the ExWitch side. Could you just give us a picture of how many of those are engaged on PCIe today? And how many of those are engaged on the UAL side?

And if you’re engaged with one on PCIe, are you often engaged with one on UAL as well? Can you maybe talk about that split right now?

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: Yes. So this is Sanjay here. So what we can note is that the 10 plus opportunities that we highlighted, these are are are both hyperscalers as well as AI platform providers. And these are all today based on PCIe. So these are near term opportunities that we’re tracking.

Having noted that, like it’s not highlighted, the uvalink is a standard and open standard that contemplates the requirements of of scale up networking, you know, in terms of speed and and other capabilities going forward. So many of these customers that we’re engaging with today with PCIe are also looking at ULE link. Some of them might continue to stay with PCIe. Some of them will transition to ULE link in the midterm. But longer term, as ULE link ecosystem develops and matures, we do expect that ULE Link will continue to be a solution that, both the, merchant GPU as well as custom accelerator provides would standardize on.

Leslie Green, Investor Relations, Astera Labs1: Helpful. And then then as my follow-up, I’m curious and there’s been obviously a lot of news articles intra quarter about switching attach rates with XPUs and then also general purpose silicon. So if you look at the large guy in the market in a 72 array, there’s there’s, you know, nine switch trays, a couple switches per. So, like, a 25% switching attach rate to a single XPU or general piece of silicon in that instance. Like, when you’re ramping an XPU with a with a a custom silicon customer, can you maybe walk us through, like, specifically with the x switch?

If that attach rate is higher or lower or what’s the reason for that, that’d be super helpful. Thank you.

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: Yeah. So the obviously, we don’t comment on individual platforms deployment scenario. But in general, the Scorpio switches, exceeded switches interconnect GPUs, and there are depending on the platform, there are different configurations for number of GPUs in a port. So within Astera and the product portfolio that we are developing is designed in a way that it addresses a variety of different use cases and the attach rate vary. So it probably will be a broad answer to your question.

But in general, we have the the engagements. We have the design wins. Now it’s a matter of all of these platforms getting qualified and ramping to production. With due course, of course, as they get into production, we’ll be able to add more color on how that’s shaping our revenue and our growth.

Rebecca, Conference Operator: Your next question comes from the line of Tore Sandberg with Stifel Financial Corp. Your line is open.

Leslie Green, Investor Relations, Astera Labs2: Yes, thank you. And let me add my congratulations as well. I guess my first question is on you talked about this new revenue base. Mean you now have three product lines in production that obviously doubled your revenue base. Now you’re talking about Infrastructure two point zero and Scorpio series or X Series really sort of creating a new revenue level.

So I mean, should we sort of infer with that that you will double the sort of run rate again as X Series starts to ramp? Is that the

Harlan Sur, Analyst, JPMorgan: way we should look at it?

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: Yeah. Great question. But I always like to make this correction. It’s not recommended three timer, just to keep it, keep our engineering folks happy. But, you make a great point, and that’s exactly we believe is is the is the is the beauty of our business model where we have approached the business in a series of of of growth steps.

We started the journey being on all the NVIDIA based platforms with the PCIe retimers, which got the company off the ground from a revenue growth standpoint. The second step that we hit was to expand our PCIe retimer and Ethernet retimer business to go after custom ASICs. So this transition happened on q three of last year. Now where we are is our third step in that growth journey where we are ramped up our Scorpio p series, PCIe based switch products along with our 86 retimers. So that’s going on all the all the, you know, third party NVIDIA based GPU platforms that are ramping.

The fourth step that we are highlighting as part of the call today is the Scorpio x series, which is designed for scale up networking. And that transition is currently underway in the sense that we are still in preproduction. And like we highlighted throughout 2026, we expect that wave to transition to high volume production, providing us a new baseline for revenue. And these are, of course, higher value sockets, meaning the the dollar content with the Scorpio x series switches are significantly higher than what we have done so far. So you could expect that to play into the overall revenue projections that we would have as we get towards 2026.

And the fifth step that we called out as part of the communication is the UA link. That is gonna be a growth story in 2027, and that is a greenfield application for us with a much broader deployment of scale up, networking along with a variety of other products that we intend to develop for UA link, and that is gonna be the fifth step that we are executing towards. Yeah. Thank you for walking through all that, Sanjay. Really appreciate it.

Leslie Green, Investor Relations, Astera Labs2: And as my follow-up, and related to ULINK, it it does feel like the standard is sort of regaining a lot of traction. I’m just curious why that is. Is it because of AI moving more into inferencing? Is it because of the one twenty eight gig version? It it just feels like there’s been a little bit of a change in the last few months.

So any color you can add on that would be great.

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: If you don’t mind, could you repeat your question? We didn’t quite get the question that you asked.

Leslie Green, Investor Relations, Astera Labs2: Yeah. I was asking about UA Link sort of regaining a lot of traction. At least that’s the way it it feels to us. And I’m just wondering why that is. Is it because of AI moving more inferencing?

Is it because of the one twenty eight gig version, or is there anything else that’s going on there?

Jitendra Mohan, Chief Executive Officer and Co-Founder, Astera Labs: Thank you for clarifying that, Torea. So ULink ULink is gaining actually a lot of traction. If you just for as a reminder, ULink was only introduced the specification was only introduced in towards the end of q one of this year. So since then, it has gained tremendous amount of traction. We’ve got, you know, AMD talked about it very recently in Taipei as part of the OCP summit.

And several of the hyperscalers are very closely engaged in figuring out what their road map intercepts will look like for ULE. And for all the reasons that we talked about earlier in the call. I will also say that majority of these engagements are at 200 gigabit per second per lane rate and not at the 128.

Leslie Green, Investor Relations, Astera Labs3: Perfect. Thank you.

Rebecca, Conference Operator: Your next question comes from the line of Sebastian Najee with William Blair. Your line is open.

Leslie Green, Investor Relations, Astera Labs3: Yes. Good afternoon. Thank you for taking the questions. A lot of the focus is rightfully on the AI tailwinds, but could you maybe comment on what you’re seeing in in non AI adoption and in particular, what you might be seeing on Gen five PCIe adoption and general purpose servers? And could that be a meaningful contributor to Ares growth going forward?

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: Yeah. Absolutely. Thanks for highlighting that. We always overlook the general compute nowadays. But to your point, that’s a transition that we’re tracking.

AMD released their Venice CPU, which does support PCIe Gen six as well. So we do see that sort of playing out in terms of design opportunities and and and the new set of production ramps happening for our eighties product line, both on the retimer class devices as well as other sockets that we develop, whether it is the Taurus modules or gearbox devices. So in general, those are additional opportunities for us to grow our business and we’re tracking those things as part of our overall overall outlook. And let’s not forget LEO products which are our CXL controllers. These are designed for memory expansion for CPUs in particular.

So finally, we have CPUs that support CXL technology and ready for deployment. So we are excited about the opportunities that we’re tracking between all the three product line, Ares, Taurus, and LEO going into the general compute use cases.

Leslie Green, Investor Relations, Astera Labs3: Great. Okay. That’s that’s really helpful. And if I could, a a second question. I I wanna ask about the the use of Ethernet and scale up going forward.

You have Broadcom positioning itself to address both the scale out and scale up part of the network with its latest generation of Ethernet chips. And I’m wondering how do you see scale up Ethernet potentially eating into that PCIe part of the market where Astera has such a strong position?

Jitendra Mohan, Chief Executive Officer and Co-Founder, Astera Labs: This is Jidenza. Maybe I’ll take this question. So if you look at, you know, our customers today, they are deploying the scale up network with the technologies that are available to them, which is NVLink for NVIDIA designs, of course, PCI Express for several other that we touched upon earlier in the call, and some of the customers are are also using Ethernet. And largely, this has to do with the availability of the switching infrastructure. You know, the two protocols, PCI Express as well as NVLink, are basically kind of custom built for memory access, for memory semantics.

So you can use, that to make your your multiple GPUs in a cluster look like one large GPU. Ethernet is a fantastic protocol, but it was never designed for scale up. It was designed for kinda large scale Internet traffic, and it is very, very good at that. However, because of the availability of the switches, some of the customers have tried to run RDMA and other proprietary protocols over Ethernet to do scale up. And in that scenario, it does suffer from higher latencies and and throughput.

Now I think what you are referring to is scale up Ethernet where Broadcom is trying to actually borrow several of the same features that are present in PCI Express and UELink, such as memory semantics, lossless networking, etcetera, and put them on top of Ethernet. At that point, it looks something quite different from Ethernet. And so the the switching infrastructure as well as the XP infrastructure has to evolve for somebody to use that. But I believe that the the differentiate the real differentiation between the two has to do with the openness of the ecosystem. The SUV is still, you know, dominated by Broadcom.

Whereas, if you look at UALINK, it’s a very open ecosystem, very vibrant ecosystem with multiple vendors working on products and multiple hyperscalers looking to really take their destiny in their own hands and and, you know, relying on UOLINK over time.

Leslie Green, Investor Relations, Astera Labs3: Great. That’s that’s really helpful. Thank you so much, and congrats on the quarter.

Leslie Green, Investor Relations, Astera Labs0: Thank you.

Rebecca, Conference Operator: Your next question comes from the line of Quinn Bolton with Needham and Company. Your line is open.

Leslie Green, Investor Relations, Astera Labs2: Hey, Cinder. I just wanted

Quinn Bolton, Analyst, Needham and Company: to follow-up on that question about SUE. Broadcom introduced their Tomahawk Ultra switch recently with a two fifty nanosecond latency, which seems like it significantly reduces the latency problems that traditionally Ethernet has had. Could you give us some sense how does that 250 latency for Sioux compare to what you’re able to achieve on PCI Express and UA Link? And then I’ve got a follow-up.

Jitendra Mohan, Chief Executive Officer and Co-Founder, Astera Labs: Yes. We’re able to achieve even lower latencies. We saw the the product we have and and the other products that we have in development. But, again, it comes back to designing something that is purpose built for AI. It is not about just the point to point latency.

If you look at the end to end latency in the system, we believe that you will link and indeed PKX plus today is going to be lower latency. And the second point about that is utilization of bandwidth. Even though over time, the the the current offering from Broadcom uses 100 gigabit per second per lane, But over time, every standard will migrate towards 200 gigabit per second per lane, both UOLINK Ethernet, as well as NVLink is already there today. However, how efficiently you use that raw data rate depends, varies from protocol to protocol. Dual link has been designed to be extremely efficient with that and and really achieve very high utilization of the data pipe that is that is available.

So on a technical basis, I do think that Dual link will be superior to other protocols. But, again, you know, not to sort of mention this yet again, but the the the big advantage of UOLINK is in its openness. That it’s an open standard that our customers, the hyperscalers, can build their infrastructure once and then ideally plug in whichever GPU or XPU they want that supports an open interoperable ecosystem like ULE. Got

Quinn Bolton, Analyst, Needham and Company: it. My follow-up question, I think in the script you guys talked about, you know, an expansion in the opportunities with Taurus. And I’m kind of wondering if you could expand on that. Is that are you seeing sort of adoption of higher per lane speeds on that Taurus product and adoption of 800 gig cables? Are you seeing adoption beyond your lead customer in Taurus?

Just any additional color you could provide on Taurus would be helpful. Thank you.

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: Yeah. So like you correctly said, and what we have shared in the past as well is that we expect broader adoption of ACs when the Ethernet that rate transitions to 800 gig. That’s starting to happen. We expect most of the deployments to be ramping up in volume in 2026. And to that standpoint, again, we’re tracking and we’re engaged with the customers that are deploying it.

One point to keep in mind is that our business model for AEC is designed for scale. In other words, we developed this cable modules that fit into the cable assemblies of existing cable vendors, and there are variety of them that service the the data center market. So our business model is to go after the RAM and not necessarily the initial few volume that that might be deployed. So to that standpoint, we’re tracking and we’re engaged with the right customers. And as the volume starts ramping, we do expect to have a significant diversification and growth in our Taurus module business.

But most of this, are modeling it in 2026 versus this year.

Quinn Bolton, Analyst, Needham and Company: Got it. So it sounds like the volume this year continues to be more 50 gig per lane. And then you see that diversification in 2026 as 100 gig per lane becomes more more you know, sees wider adoption.

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: Exactly. And our business model, like I noted, is designed for that multi vendor cable supply chain. And we do believe that’s the right strategy, and that’s what hyperscalers look for. The initial POC’s limited volume deployment, you know, they might go with one vendor. But very quickly, each one of these hyperscalers do wanna have the diversity and and and as well as the supply chain capacity to drive volume.

And that is essentially being our focus when it comes to a business model on the AEC side.

Leslie Green, Investor Relations, Astera Labs0: Got it. Thank you.

Rebecca, Conference Operator: Your next question comes from the line of Papasila with Citi. Your line is open.

Leslie Green, Investor Relations, Astera Labs0: Thank you for taking my question and great, great thank you and congrats for the great results. My I guess my first question is kind of following your your announcement of a partnership with a high kind of performance basically here recently. I I guess, can you touch a little bit more on the kind of extent of that collaboration? Is it more at a chip chip level in terms of the IO chip type of kind of partnership, or is it more at a kind of device level with your agents portfolio portfolio?

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: Yes. So I’ll answer that question by sort of sharing our vision and goal that we’re executing towards. So our vision is to provide purpose built connectivity platform for AI infrastructure that includes silicon products, hardware products, and software products. Of the focus for us has been on the connectivity side of the AI rack. When you think of an AI rack, there are other components that go, which primarily includes the compute notes, whether it’s based on third party merchant GPUs and CPUs or custom ASICs that Alchip and others develop for hyperscalers.

So what we are a strong believer in is that the AI rack, the way it’s defined today is not scalable in the sense that it’s more proprietary. As the industry transitions to what we’re calling AI infrastructure two dot o, the entire AI rack has to be based on a open, scalable, multi vendor type of type of approach. And to that standpoint, what we’re doing is not only developing the connectivity products for addressing the various aspects of an AI rack, whether it’s scale up or scale out and other connectivity. At the same time, we are partnering with, you know, third party GPU vendors. We talked about the announcement that we did with AMD.

We’re also engaging with custom ASIC providers including Alchip. So that end of the day, the hyperscalers who are our common customers get a a rack that is well tested, interoperable, the software is all consistent, and so on to ensure that it delivers the highest level of performance. So that is the scope of the collaboration that we’re having with Alchip and other providers. And over time, you will see us announce more partnerships as we seek to establish the open rack that we believe is critical for deploying AI at scale.

Leslie Green, Investor Relations, Astera Labs0: Got it. No. That’s that’s very helpful. And if I can squeeze just one more, and this might be more for for Mike. On the gross margin, it seems like over the last two quarters, particularly since the Scorpio announcement, kind of gross margin keeps going up.

But I’m in the September, you are guiding it to 75%, which at the very least of the midpoint seems to be kind of down a little bit. I’m I’m just curious on just any additional color on that because it seems like by all indications, Scorpio will continue to go up, and the mix trend we are seeing currently, it seems to be kind of moving in the same direction in September as well. So we were just kind of curious on that guide down in gross margin in September.

Mike Tate, Chief Financial Officer, Astera Labs: Yeah. We we do see growth from Scorpio, but we also see a good solid growth in TORs as well during the quarter. So, you know, the TORs as a module, it’s hardware, so it carries a little bit lower gross margin to stand alone silicon. So you’ll see that dynamic play out to a smaller extent in the quarter. And, you know, as we move move into 2026, we still want to have people thinking of us going towards our longer term model of 70%.

Rebecca, Conference Operator: Your next question comes from the line of Suji Desilva with ROTH Capital. Line is open.

Harlan Sur, Analyst, JPMorgan: Hi, Jitendra, Sanjay, Mike, congrats on

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: the strong quarter here. Maybe you could

Leslie Green, Investor Relations, Astera Labs4: give us a framework on the retimer content for a link that’s for scale out versus scale up. Maybe it’s similar, but maybe there’s some differences. It’d be curious to understand what the unit opportunities might be and how that that might be different.

Jitendra Mohan, Chief Executive Officer and Co-Founder, Astera Labs: Yeah. So when you look at the the retimers, you know, the the contrast with the switches is the following, which is the switches get designed in right at the inception of the architecture stage. You know, customers will think about how they are going to either their GPU to other GPUs in a scale up or the GPU to mix or storage as part of that scale out system. So once the switch is designed in and as the rack starts to get put together, then we look at the question of of reach. And sometimes you you find that you need retimers in a link.

Other times, actually, you don’t need retimers in the link. Sometimes the retimers go on the board as a kind of a chip down format, but other times, they are better suited to be put in in cables, in an AC format. The good news with us with Astera is that we provide this full portfolio of devices for our customers to choose from, from from switches to gear boxes, to chip down retimers, to retimers in inactive electrical cables. So they can look at, you know, one company, one Astera to figure out their entire all the solutions at the rack level.

Harlan Sur, Analyst, JPMorgan: Okay. And just on the neither one would

Leslie Green, Investor Relations, Astera Labs4: be higher than the other necessarily, just to be clear.

Jitendra Mohan, Chief Executive Officer and Co-Founder, Astera Labs: Can you repeat that?

Leslie Green, Investor Relations, Astera Labs4: Neither one will be higher than the other, scale up versus scale out, necessarily.

Jitendra Mohan, Chief Executive Officer and Co-Founder, Astera Labs: Yeah. The the it really depends upon the system architecture. In scale up, there are many, many more links than there are in scale out. However, it is prohibited from a power standpoint to put retimers on all the links. So, typically, you will see, you know, the links that are shorter, where you are able to go from the switch to the GPU over a shorter distance will not use retimers, but the links that are longer will potentially use retimer.

Sometimes we have scale up domains that exceed one rack. So you might have two racks side by side that are part of a scale up domain. And in which case, you end up with cable solution, and and the the you need retimers in the scale up in those scenarios.

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: Helpful. Thanks. And then my follow ups on Scorpio X,

Leslie Green, Investor Relations, Astera Labs4: you talked about 10 customer engagements. I’m wondering if that implies multiple programs per customer, if they’re gonna think about using a standard in their platforms. Any color on how those are kind of shaping up would be helpful in programs versus customers.

Sanjay Gajendra, President, Chief Operating Officer and Co-Founder, Astera Labs: Yes. So templates we noted are unique customers. Now within each customer, there are multiple opportunities that we’re tracking. Some of them are, you know, design wins and some of them are ramping to production. Some of them are design in scoring to qualification.

Some of those are, you know, early engagement. So in general, we are very pleased with the amount of traction that we’re seeing for our Scorpio family. Family.

Harlan Sur, Analyst, JPMorgan: There

Rebecca, Conference Operator: are no further questions at this time. I will turn the call back over to Leslie Green for closing remarks.

Leslie Green, Investor Relations, Astera Labs: Thank you everyone for your participation today and questions. And please refer to our Investor Relations website for information regarding upcoming financial conferences and events. Thanks so much.

Rebecca, Conference Operator: This concludes today’s conference call. You may now disconnect.

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